LOS ANGELES — Branded residential developments are increasingly an important part of getting any luxury hotel project off the ground.
The demand for branded residences is so high that half of Marriott International's new luxury hotel signings include a residential component, said Dana Jacobsohn, Marriott's chief development officer for North American luxury brands and global mixed use.
Residences "are not required to make a deal pencil, but they sure are helpful," she said during the mixed-use and branded residences panel at the 2026 Americas Lodging Investment Summit.
The ability to sell residential units is key in managing development costs of luxury hotels, Jacobsohn said.
"I think most of the developers in the room are realizing that luxury hotels are hard to build," she said. "Their cost of capital is expensive, and the other challenge is [the profit-and-loss statement]. There are really high costs, like labor and insurance costs. All of the pieces of the hotel are complicated. So residential allows for higher returns."
Jonathan Wingo, global head of residential programs for Hilton, said both the ability to finance part of construction through residential sales and speed to market are key factors for the popularity of branded residential in the luxury hotel space.
"So you're building this and to know where your cost — and presumably your sale price — is, you have to be able to move in a quick, short timeframe," he said. "Partnering with the brands that can get you to your vision as quickly as possible moves the needle for developers, and they're hyper-focused on that. And I think that's really a global phenomenon."
Robin Kennedy, executive vice president and chief development officer for Montage International, said branded residences often work best as part of larger mixed-use developments.
"For example, the Pendry Manhattan West was part of something broader," she said. "There was office. There was retail. There was a hotel, and all of those uses were elevated by what the hotel brought and the brand halo it created."
Jeff Tisdall, chief business officer and global head of mixed use for Accor One Living, agreed.
"There are several opportunities within mixed-use projects with the same dynamics that really make branded residences perform," he said. "The notion of shared services, shared amenities, the ability of a brand really to elevate the product, elevate the service offering, lend an aspirational element. Those dynamics, in many cases, apply just as much to other elements that we could bring into mixed-use projects."
With brands more and more moving away from management of even their luxury properties, there is some question of how that factors into branded residential.
Particularly in the ultra-luxury hotel segment, brand management remains the preferred deliver method, Tisdall said.
"There's a really critical role that the brand plays, not only in terms of helping the developer translate the brand into inform design, inform architecture, but really translate it into the service offerings, create a set of promises that can be then delivered in the operating phase."
Wingo agreed, adding it even helps in the residential sales phase of the project.
"What [developers] really like to be able to pitch to their clients is that you know a Hilton is going to manage your home," he said. "So bringing 100 years of hospitality into your home through brand-direct management is what helps bring that lift, bring that confidence."
But Jacobsohn said there will increasingly be space for third-party operators in branded residential.
"If your hotel is under one of our premium brands and operated by a third party that we approve, of course we believe they should also be managing that residential component," she said. "If they don't have as much experience on the residential side, well, we'll train them."